Boteng Pharma's Slovenia Investment Project Faces Significant Risks, Potentially Dragging Down 2026 Performance

PORTON(300363) Announced on the evening of May 13 that the R&D and production base project in Slovenia, constructed by its wholly-owned subsidiary PSI, has significant disputes, which may have a major adverse impact on the company’s financial condition and operating performance for the fiscal year 2026.

PORTON is a pharmaceutical Contract Development and Manufacturing Organization (CDMO) that provides full-category, end-to-end services globally for pharmaceutical companies, biotech firms, research institutions, and more. It offers CDMO services for various types of drugs and therapies, including small molecule drugs, large molecule drugs, cell and gene therapy, and new modalities. By the end of 2025, the company will have 18 operational sites in China, the United States, and Europe.

The Slovenia R&D and production base project that has fallen into controversy this time was launched by PORTON in August 2022. Through its wholly-owned subsidiary PSI, PORTON leased a site from Novartis to establish an R&D and production base in Slovenia. This facility focuses on GMP intermediate and active pharmaceutical ingredient (API) process development, analytical method development, and kilogram-to-hundred-kilogram scale preparation services required throughout the entire lifecycle from preclinical to clinical stages and up to drug market entry. In May 2024, the B31 R&D facility completed renovation and began operations, while the B30 production workshop is expected to complete construction and building topping-out by December 2025. However, due to compliance issues with the preliminary approval procedures for the B30 workshop, the company has decided to postpone subsequent investments.

The announcement showed that, recently, the Company received a written notice from Novartis about the unilateral termination of an overall agreement. Novartis unilaterally required the Company to move out of the park and return the site within 90 days. Novartis claimed that PSI’s suspension of the production workshop construction had constituted a substantial breach of contract. Novartis would reserve the right to claim service fees and compensation for losses from PSI totaling approximately 54.7 million euros (estimated amount). As of now, the Company and its subsidiary PSI have not received any notice from Novartis indicating the initiation of formal legal proceedings.

PORTON stated that the company does not recognize the above claims made by Novartis and expressed regret over Novartis' unilateral termination of the comprehensive agreement. The company will actively maintain communication and negotiation with Novartis, and will take legal measures as necessary to fully protect its legitimate rights and interests.

The listed company stated that its current production and operations are proceeding normally, and the aforementioned matters will not impact the normal conduct of the company’s business. The company also highlighted risks, stating that if the aforementioned matters do not progress as expected, the company may face significant risks such as impairment of related assets, potential contract performance risks, employee litigation, or compensation risks resulting from the cessation of PSI's operations. These risks are expected to have a materially adverse effect on the company’s financial condition and operating performance for the fiscal year 2026.

In terms of performance, PORTON achieved operating revenue of 3.42 billion yuan in 2025, a year-on-year increase of 13.54%, with a net profit attributable to shareholders of 96 million yuan, successfully reversing the loss; in the first quarter of 2026, it achieved operating revenue of 886 million yuan, a year-on-year increase of 10.59%, with a net profit attributable to shareholders of 27.8651 million yuan.